Is NRG Energy, Inc. overvalued or undervalued?

As of 30 July 2025, the valuation grade for NRG Energy, Inc. has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company appears to be overvalued based on its key ratios, including a P/E ratio of 29, a Price to Book Value of 21.02, and an EV to EBITDA of 18.07. In comparison to peers, NRG Energy's P/E ratio is notably higher than Ameren Corp.'s 22.36 and PPL Corp.'s 26.31, both of which are also considered very expensive.
Additionally, NRG Energy has demonstrated strong performance with a year-to-date return of 81.99%, significantly outpacing the S&P 500's return of 12.22% over the same period. This impressive stock performance, however, does not mitigate the concerns regarding its high valuation metrics, reinforcing the conclusion that the stock is overvalued.